Saturday, January 28, 2017

Here comes the biggest merger in the sector of telecommunications? – Jornal de Negócios – Portugal

The Verizon and Charter will be exploring a merger. The intention of the operators to move forward with a business combination was reported on Thursday. But, this Friday, the Financial Times, gives an account of one more step for the realization of this hypothesis, moving companies already have hired financial advisors to evaluate a possible business.

The newspaper, which cited anonymous sources close to the process, recalls, however, that this movement happens at a point in time that the groups of north americans are preparing for a radical change of regulation by the new administration of Donald Trump.

The talks between the executives of Verizon and Charter Comnunications are still at an early stage, and there is no concrete proposal on the table, according to the tables sources. But both companies are to seriously study the operation that would create the largest carrier of internet fixed and mobile, says the FT.

Taking into account the current value of the shares, the marriage between Verizon and Charter will create a company with a market capitalisation of 282 billion dollars (about 264 billion). A value that outweighs the future business between AT&T and Time Warner: 255 billion (238 billion euros).

While the operation of the AT&T and Time Warner, announced in October, still awaiting the green light from regulators and its outcome is seen as the litmus test for future business of the genus, this new marriage is not viewed with much optimism.

According to the leader of the Free Press, a nonprofit group that promotes the distribution of free internet, the prospect of a merger between Verizon and Charter is “unthinkable”.

“A business like this can inspire the Wall Street bankers and industry lobbyists, but anyone can see that would be a disaster for competition, innovation and the public interest,” he told the Financial Times Craig Aaron.

The hiring of financial advisors on the part of Verizon, and the Charter takes place at the same time being prepared to change the leadership of the regulator of the telecommunications sector of the U.S., the Federal Communications Commission in English, following the election of the new president.

Ajit Pai was the name appointed to head the regulator and, according to a source from the presidency of Donald Trump, the 'orders' are for the start of a greater consolidation among companies in the telecommunications, media and technology.

The appointment of Ajit Father to preside over the FCC gave confidence to the telecommunications companies for the implementation of these operations that should not have the same ease on the part of regulators of the European Union, according to the FT.

Verizon, which won the race by Yahoo, has 114 million subscribers of mobile internet and the Charter sum, 17 million pay tv customers and 21 million internet users.